Global trade is slowing

Global trade is slowing

Global trade is slowing

The Japanese export market did not survive the economic crisis without harm. In the previous years, Japan could always rely on increasing demand for its export from developing and emerging countries, but the drop in exports of 7,7 % in Ocotober has shown that emerging-economy demand for its goods has also been hit. Japan is only an example of a rich country which is affected by slowing trade. Germany which is known for its high-quality exports has also experienced a heavy decline. Since high-quality goods have high elastic demand, the demand for these goods decreases massively when there is an economic crisis. Poor countries, however, who normally produce cheap quality goods are better off at the moment, because the goods tend to be necessities that people still buy in bad times. Poor countries are facing the problem that they are lacking trade credit for finance due to the global shortage in liquidity caused by the financial crisis. Now, export credit agencies and the World Bank try to restore the liquidity in the market by providing more money.